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Energy customers unwilling to pay full price for smart meters

23 Sep 2016


  • Survey shows under 1% would choose to pay for new meters when told of full £400 cost
  • Business leaders say problems with technology and energy savings must prompt government review

Less than one per cent of energy customers would willingly cover the full cost for smart meters if they had a choice, a new survey has found. Advertising funded by utility companies claims the new electricity and gas meters come ‘at no extra cost’*, but the £11 billion price tag of the programme will be paid for by households in their bills, working out at over £400 each. 

When the Institute of Directors, a leading business group, asked its members how much they would personally choose to pay for the meters, nine in ten were prepared to meet no more than half the cost (£200), while half would refuse to pay anything if they had the choice.

The IoD said that unnecessarily complex technology was the reason for the high cost of the scheme, which involves installing 53 million smart meters in 30 million households and businesses across England, Scotland and Wales. The meters are meant to remove the hassle of manual readings, but there is alternative technology available, including clip-on readers, which would be much cheaper†. Part of the new IT system which was designed to send data from the meter to energy companies was also recently delayed.

There are also questions over how much benefit consumers will see from the new in-home displays, which are meant to help households monitor their energy use. The Public Accounts committee has warned that the savings on energy bills might be as little as two per cent a year‡. Given the issues with the technology, the minimal savings, and the unwillingness of consumers to meet the cost, the IoD is urging the Government to urgently review the benefits of going ahead with the project. 

Dan Lewis, Senior Energy Adviser at the Institute of Directors;

"The Prime Minister has shown willingness to review major infrastructure projects where there are question over value for money, as she did with the Hinkley nuclear plant. Now is the right time to review the smart meter programme, which is an overly complex scheme for which the benefits are far from clear. There are much cheaper ways of automating meter readings, increasing switching and monitoring energy use, but instead we are pushing ahead with costly technology without consumers having all the facts.

“It looks very unlikely that smart meters will meet the target to be fully deployed December 2020. Even worse, many of the smart meters going in now will not work if the customer switches to a new supplier. Households are being told that the meters come at no extra cost, but when we asked people about the £400 the programme will add to their bills, less than one per cent said they would pay it voluntarily.

“We think there should be consumer-focused review which addresses two key questions: how can this be done cheaper, and how can most of the benefits be transferred to consumers?"

998 members of the Institute of Directors were asked about smart meters between 11 – 26 May 2016.

Question: Smart meters are devices that record and display information on home energy use, and also send this data to the energy provider, removing the need for meter readings. The cost per household of the programme is over £400, paid through your energy bills. If you were spending your own money, how much would you be willing to pay to have smart meters installed?

Nothing

50.10%

£0.01 - £100

25.45%

£101 - £200

15.13%

£201 - £300

3.31%

£301 - £400

1.40%

£401 - £500

0.70%

Not sure

3.91%

*This television advert run by Smart Energy GB claims: “by 2020, every home in Britain can claim a smart meter from the energy supplier at no extra cost” - https://www.youtube.com/watch?v=JrO31yaaBUM . While there is no upfront transparent cost on energy bills, the £10.9bn cost of the programme will be paid for by energy customers in their bills over the installation period. Smart Energy GB say in their annual report: “we are funded on an annual basis. We agree our budget annually and funds are received from domestic energy suppliers” https://www.smartenergygb.org/en/about-smart-energy-gb/annual-report.

†For example, Loop have a system which costs a fraction of the smart meters at £60 https://loopenergysaver.com/product/dual-fuel/lifetime. First Utility have developed a smartphone app which reads meters https://www.first-utility.com/the-utility-room/meter-reading-made-easier-by-the-uks-first-point-and-shoot-meter-reading-feature

‡In September 2014, the Chair of the Public Accounts Committee, Margaret Hodge, said “Despite consumers footing the bill, they can on average make a saving of only 2% on the average annual bill of £1,328 by the time the roll out is complete.” http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/report-smart-meters/


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